Detroit Automakers Pledge $26 Million to Help Save City’s Art

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Detroit’s world-class art collection has been a subject of constant contention during reorganization proceedings.CreditCreditPaul Sancya/Associated Press

By Steven Yaccino

June 9, 2014

CHICAGO — The Detroit Institute of Arts announced Monday that the nation’s three major automakers would donate a combined $26 million to help save the city’s art collection, bringing the city a step closer to completing a deal aimed at coming out of bankruptcy by fall.

The Ford Motor Company and General Motors each committed to giving $10 million to help the institute raise $100 million as part of a so-called grand bargain that would also ease pension cuts for city retirees. Chrysler, the smallest of the three American automakers, will contribute $6 million.

“The D.I.A. and the city of Detroit need our help,” Joseph R. Hinrichs, executive vice president of Ford, said at a news conference at the museum. “And we are here, as we’ve always been, to do our part.”

General Motors and Chrysler emerged from their bankruptcy reorganizations in 2009, avoiding collapse with the help of billions of dollars in assistance from the federal government. With Monday’s announcement, the three automakers add to a growing list of philanthropic gifts trying to make the nation’s largest municipal bankruptcy less painful for the hometown of America’s auto industry.

Detroit’s world-class art collection has been a subject of constant contention during reorganization proceedings. Creditors have suggested selling the city’s collection, which includes pieces by van Gogh, Bruegel and Matisse, calling it an untapped source of cash for a city with an estimated $18 billion in long-term liabilities and shrinking revenues. But the notion has outraged others, who say a sale would rob the struggling city of one of its most valuable assets. Museum officials have also argued that selling masterpieces could lead to the museum’s closing because donors would feel betrayed and stop giving.

Last year, Kevyn D. Orr, the state-appointed emergency manager in Detroit, hired Christie’s to appraise a portion of the museum’s masterpieces. The auction house said selling those works would net up to $867 million, a number that has since been criticized by some of the city’s creditors as being below market value.

As part of a larger deal forged amid federal bankruptcy court mediation sessions, the Detroit Institute of Arts agreed earlier this year to raise $100 million to help rescue itself over the next 20 years. The money would join more than $370 million in private philanthropic donations and nearly $200 million in state funds, which were approved last week by the Michigan Legislature.

The arrangement would funnel those financial contributions toward lessening pension cuts for Detroit retirees. It would also put ownership of the art museum under a private nonprofit organization that currently operates the museum, a common governing structure for large public art institutions across the country, shielding the city’s 66,000-piece art collection from future municipal threats.

Still, potential roadblocks remain. Creditors have objected to the deal, saying that it favors retirees over banks and that they could get more by selling the art outright. And the city’s 20,000 retirees must first voice support for Detroit’s bankruptcy plan, which will require them to vote for cuts to some of their benefits. In the end, a federal bankruptcy judge must sign off on the deal after a trial scheduled for this summer.

On Monday, the judge, Steven W. Rhodes, pushed back the start of the trial until Aug. 14, a delay that puts more pressure on the city to get a plan approved before the emergency manager leaves office in September.

“Let’s build on this,” Gov. Rick Snyder of Michigan said Monday. Standing in front of a mural depicting a scene from inside an automotive manufacturing plant, he added, “We’re accelerating.”

Correction:June 9, 2014

An earlier version of this article misstated the amount of state funds going to the museum. It is $200 million, not $200.

A version of this article appears in print on , Section A, Page 15 of the New York edition with the headline: Automakers Pledge $26 Million to Save Detroit Art. Order Reprints | Today’s Paper | Subscribe